November 2022
The global energy transition continues to drive EV demand, which in turn fuels battery-grade nickel demand. AME is forecasting EV sales to be 10.5m in 2022, which will increase to 14.9m in 2024. The EV market share will also increase from 13% in 2022 to 17% in 2024.

Nickel containing batteries, including the NCA and NCM chemistries, are expected to account for 69% of total battery production, with LFPs accounting for the remaining 31%. Assuming each battery contains ~40kg of nickel will bring total battery-grade nickel demand to approximately 290ktpa in 2022.



Meeting this demand is challenging, as the traditional method of nickel sulphate production always relied on sulphide ores, due to a simpler processing route. The extracted ore undergoes beneficiation to form a concentrate that is then smelted and refined to class 1 products (with over 99.8% nickel content).

However, this ore type only accounts for one quarter of global nickel reserve. As major sulphide operations deplete, battery producers will need to shift their attention towards the abundant but historically neglected laterite ore.

Lateritic deposits occur near-surface in tropical climates and are formed with the weathering of ultramafic rocks. The lower grade and higher moisture content of the ore make it suitable for the production of nickel pig iron (NPI) and ferronickel with blast furnace (BF) and rotary kiln-electric furnace (RKEF) technologies.

Mounting demand for higher grade nickel is drawing increasing attention to an alternative metallurgical process capable of treating laterite ores – the high-pressure acid leach (HPAL) process. Two types of intermediates can be produced. Including mixed sulphide precipitate (MSP), which is processed into matte, or mixed hydroxide precipitate (MHP), which is further refined to sulphates.


Existing Operations

There are currently 12 producing HPAL projects worldwide. MSP is produced at Murrin Murrin, Coral Bay, Taganito and Ambatovy. Murrin Murrin and Ambatovy further refine their intermediates to class 1 briquettes and powders.

While MHP is produced at Moa Bay, Goro, Ravensthorpe, Ramu, Gordes, Halmahera, Huayue and QMB. Prony Resources and Tsingshan have announced plans to extend their production line downstream to process the MHP into nickel sulphate themselves, instead of selling the intermediate to third parties.



The Process

The laterite slurry is fed into an autoclave and leached with sulphuric acid at 250°C and 5,000kPa. The acid is pre-neutralised with limestone before being separated from the leach residue with counter-current decantation, producing a nickel cobalt containing pregnant solution. This solution is further neutralised with limestone.

The process then diverges depending on whether it produces MSP or MHP. MSP is produced with the addition of hydrogen sulphide in a pyrometallurgical process. While MHP is produced with the addition of magnesium oxide or sodium hydroxide in a hydrometallurgical process.

HPALs offer distinct advantages, predominantly its ability to process low grade ore feeds. They also have a high recovery of by-products including cobalt, chromite and even ammonium sulphates, further boosting revenue. The MHP produced is also cheaper to source and fluctuates less than class 1 nickel.

However, implementation of these operations has caused an assortment of problems. Their high initial capital expense is a major barrier to entry. The recently commissioned QMB is reported to have a construction cost of US$700m. They also require high operating costs due to the high pressure, temperature and acidic conditions required in the autoclave.

Ore grade variations have also delayed many HPAL operations, such as Murrin Murrin and Goro, from reaching their nameplate capacity. The Ambatovy plant in Madagascar has yet to reach its nameplate capacity of 60ktpa and is now assumed to be only able to reach 50ktpa of contained nickel production. Additionally, HPALs are limited to only process low magnesium limonite ores, leaving the higher magnesium saprolite unsuitable as feed.

However, Metallurgical Corporation of China (MCC)’s majority owned Ramu operation in Papua New Guinea has finally solved the issue of slow ramp ups. The technology was perfected and replicated in new Indonesian projects. This has induced a series of rapid HPAL development, as new projects are capable of reaching capacity within two to three years.


Project Pipeline

New development is concentrated in Indonesia to capitalise on its rich reserve of laterite ores. Vale’s Pomalaa project is a 120ktpa nickel in MHP HPAL collaboration with Huayou Cobalt, after Sumitomo’s unexpected withdrawal.

The companies have agreed that coal-fired plants will not be used to power the operation. Ford Motor will have the right to acquire up to 84ktpa of nickel for its EV battery production when the project comes online in 2025.

Eramet and BASF will also be developing an integrated smelter and refinery complex in Weda Bay. This includes a 42ktpa MHP HPAL and a base metal refinery that will produce nickel and cobalt precursor cathode active materials (pCAMs).

Outside of Indonesia, Horizonte’s Vermelho project in Brazil has the highest chance of commissioning, with a Feasibility Study underway. Other projects in Australia are also being slowly advanced, although they are still in the exploration stage.



Don’t Forget Carbon

The energy intensive nature of the HPAL process also raises the carbon intensity of nickel produced, which contradicts the purpose of an EV if it is used in the battery. Production of one tonne of class 1 nickel from sulphides emit approximately 10tCO2, while producing from HPALs emits 19tCO2. This makes HPAL produced nickel less attractive to manufacturers in ESG centric regions such as the EU and North America.